DALLAS -- Pilots at regional airline American Eagle rejected a contract proposal that they said would freeze their pay and cut health-insurance benefits.
Eagle has about 2,700 pilots, and the Air Line Pilots Association said Friday that about 70 percent of those who voted rejected the contract offer.
The company responded by saying that it will hire other regional airlines to operate 60 new jets that it has ordered and retire some of Eagle's smaller and less-efficient planes, causing the carrier to shrink.
Eagle President Pedro Fabregas said in a letter to employees Friday that he was disappointed. He said that Eagle will remain an airline but would be forced to cut costs as it shrinks.
Bill Sprague, chairman of the union's managing council for Eagle, said the contract offer was unacceptable because it froze pay scales until 2018 and then provided annual raises of just 1 percent. Seniority raises would also be curtailed.
Regional airlines are a training ground for larger, so-called mainline carriers. At Eagle, pilots hope to someday move up to American Airlines, although that career path has been clogged by slow growth -- or none at all -- at the big airlines since 2001.
Sprague said Eagle pilots believed that instead of accepting a long-term contract with little gain in wages, they would be better off trying to get jobs at American, JetBlue, Spirit and other airlines that are hiring.
The union said Eagle pilots start at less than $23,000 per year. If the contract had been approved, pay for co-pilots would have been capped at about $38,000 per year after four years of experience.
American Airlines Group Inc. plans to rename Eagle as Envoy later this year and use the Eagle name to describe all regional flying, regardless of which carrier operates the flights.
Regionals operate smaller planes that often fly on secondary routes and connect passengers to big hub airports that are served by so-called mainline airlines such as American, United and Delta. Regional airlines are complaining about a shortage of pilots. Unions say the airlines need to raise pay to attract more pilots.